April 16, 2012

 

Asia soy prices up on strong export data

 

 

Soy prices is expected to rise further on the back of strong export US data, even as overnight prices deter spot traders from making purchases, analysts said Friday (April 13).

 

Futures on the Chicago Board of Trade closed at a fresh seven-month high Thursday (April 12), boosted by optimism about export demand and favourable overseas markets.

 

"Due to supply tightness, and with prices in backwardation, CBOT corn could test new highs," Kaname Gokon, Tokyo-based deputy general manager at Okato Shoji, said.

 

CBOT May soy closed up 19 cents, or 1.3%, at US$14.41 a bushel, the highest settlement price for the contract since Sept. 9.

 

Gokon said the May contract could test US$14.50 if it breaches Thursday's high decisively.

 

US soy prices, which are considered high by spot traders, also got a boost from fresh signs of strong Chinese demand.

 

China's Commerce Ministry said Thursday that the country's April imports will likely reach 5.6 million tonnes, up 16% from March and up 44% from a year ago.

 

Separately, the USDA Thursday announced the sale of 115,000 tonnes of soy for delivery to China, including 55,000 tonnes for delivery this marketing year ending Aug. 31.

 

The USDA also announced a sale of 189,000 tonnes to "unknown destinations," including 79,000 tonnes for delivery this year.

 

Tokyo-based veteran grain trader Nobuyuki Chino said Wednesday (April 11) that China has little option but to buy US soy as South American beans aren't competitive enough. China is the world's top importer of soy.

 

Like many traders and analysts, Chino and Gokon are cautious of the bullish trend and are waiting for plantings to start next month. Chino is also President of Continental Rice Corp.

 

ANZ Research said in a report Friday that US soy exports should continue to increase to 6.6 million tonnes from March to May. "Otherwise, this will spill into significant additional exporter pressure [from June to August]."